European ARM Firm Intrum Justitia Adjusts Cost Accounting

Effective from 2012, Intrum Justitia, a large Stockholm, Sweden-based accounts receivable management firm, will apply a new principle regarding the allocation of shared expenses between the Group’s two services lines, Credit Management and Financial Services. The results of the service lines have previously included an allocation of the majority of the Group’s shared expenses.

According to the new principle, only expenses that can directly be attributed to one of the service lines will be included in that service line’s results, such as production expenses, IT expenses and sales expenses. Expenses of a more shared nature, mainly for marketing and administration, will not be allocated to the service lines, but will instead be reported as shared expenses.

“Our assessment is that this change will provide a more accurate view of the Group’s profitability based on its service lines. Operations within Credit Management and Financial Services are conducted uniformly in each region within the framework of our geographical organization, which means that results reported for the service lines including a lower share of allocated expenses are more relevant,” says Erik Forsberg, CFO at Intrum Justitia.